Cash-strapped PharmEng cuts back again
The company’s vice president Charles Ivey – as well as marketing John Durham – have departed alongside Fielding while chief executive Alan Kwong has slashed his salary in half.
The effort to cut corporate costs has also seen the departure of five board members, namely Bernard Boudreau, Edgar Parker, Aditya Jah, Vasu Chanchlani and Michael Sefton.
This is just the latest in a string of cost-cutting efforts at PharmaEng and its subsidiary Keata Pharma in the last few months. The firm has been desperately trying to raise cash from institutional investors while simultaneously paring back staffing at its facilities.
At the heart of its recent problems is the performance of the Keata Pharma facility in Sydney, Nova Scotia, which took longer than anticipated to build and come online.
In addition to this facility PharmEng operates another at Arnprior, Ontario, which was acquired from Pfizer at the end of 2007.
Prior to the capital investment in these facilities PharmEng was mainly a consulting business, with a small production facility in Cape Breton, Nova Scotia, and saw great potential in expanding into the contract manufacturing sector which at the time was showing buoyant growth.
The investments led to the firm posting a loss of C$15.6m for the nine months ended September 30, - the last financial figures posted by the firm. PharmEng also had negative cash flow from operations during that period of $6.9m.
While still a growth sector, contract manufacturers are feeling the effects of a reduction in new projects coming through the clinical pipeline, particularly from smaller companies, which causing overcapacity in the marketplace.
